Correlation Between CEVA and Wolfspeed
Can any of the company-specific risk be diversified away by investing in both CEVA and Wolfspeed at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining CEVA and Wolfspeed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CEVA Inc and Wolfspeed, you can compare the effects of market volatilities on CEVA and Wolfspeed and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in CEVA with a short position of Wolfspeed. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEVA and Wolfspeed.
Diversification Opportunities for CEVA and Wolfspeed
Very good diversification
The 3 months correlation between CEVA and Wolfspeed is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding CEVA Inc and Wolfspeed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wolfspeed and CEVA is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on CEVA Inc are associated (or correlated) with Wolfspeed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wolfspeed has no effect on the direction of CEVA i.e., CEVA and Wolfspeed go up and down completely randomly.
Pair Corralation between CEVA and Wolfspeed
Given the investment horizon of 90 days CEVA Inc is expected to generate 0.51 times more return on investment than Wolfspeed. However, CEVA Inc is 1.95 times less risky than Wolfspeed. It trades about 0.03 of its potential returns per unit of risk. Wolfspeed is currently generating about -0.04 per unit of risk. If you would invest 2,472 in CEVA Inc on August 31, 2024 and sell it today you would earn a total of 502.00 from holding CEVA Inc or generate 20.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CEVA Inc vs. Wolfspeed
Performance |
| Timeline |
| CEVA Inc |
| Wolfspeed |
CEVA and Wolfspeed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEVA and Wolfspeed
The main advantage of trading using opposite CEVA and Wolfspeed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEVA position performs unexpectedly, Wolfspeed can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Wolfspeed will offset losses from the drop in Wolfspeed's long position.| CEVA vs. MagnaChip Semiconductor | CEVA vs. MACOM Technology Solutions | CEVA vs. FormFactor | CEVA vs. MaxLinear |
| Wolfspeed vs. NXP Semiconductors NV | Wolfspeed vs. Analog Devices | Wolfspeed vs. Microchip Technology | Wolfspeed vs. Monolithic Power Systems |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stocks Directory module to find actively traded stocks across global markets.
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